PT
Classroom - The Three Types of Rehab
Practices׀ by Englebert De
Vera,
PT

Engelbert De Vera,PT has been a Physical Therapist since
1998. He worked in the corporate world for the first 6 years
of his PT career and decided to go solo in mid 2003. He
ventured in different businesses but has kept
his interest in using his knowledge as a PT to create his
own rehab company. In this article, he will differentiate
the 3 types of Rehab Practice and show you the practice of
his choice using the formula that made him $480/hr in one
TKR case.

The
Three Types of Rehab Practices

It is not uncommon among therapists that whenever we hear
the term private practice we automatically think of a clinic
filled with exercise equipment and having patients go in and
out of the facility on a weekly basis. However, that kind of
private practice is actually just one among the 3 types of
REHAB practices I’m about to discuss in this article. You’ll
be surprised to see that there’s actually other options
besides the traditional clinic.

You may already know the types I’m about to discuss, but
this article will break down the basic requirements of each
practice so you can see and decide which type is best suited
for you to get into in case you’ve been considering to have
a practice you can call your own.

First Let’s Define PRIVATE PRACTICE.What is Private Practice?
- to engage in one's profession as an independent provider
rather than as an employee.

OK So Here Are The 3 Types
Of Rehab Practices:#1 - TRADITIONAL OUTPATIENT CLINIC: Like I said, this
is the most common type and it’s usually what we see in most
cities. It’s the BRICK & MORTAR Outpatient model where you
normally bill under Medicare part B and patient’s insurance.
So let’s see what it takes to do this model.
1. Good amount of capital required. A friend of mine who
used to have his clinic spent at least $200,000.- in his 1st
year of putting up his practice. This covered his rent,
payroll and equipments plus marketing expenses.
2. Building space required which means you have to hire a
contractor to build it for you to make sure you’re compliant
with the city codes.
3. Requires registration of the facility and don’t ever
forget to renew it or you’ll be penalized.
4. Requires application for Medicare provider number for
each therapist.( be ready to do paperwork ! )
5. Requires coding accuracy to bill Medicare. ( Hello ICD-9
codes ! )
6. If you outsource billing you have to pay a certain
percentage of the reimbursement which can go as high as 8%
to 10%. ( do it yourself or outsource ?)
7. Subject to Medicare cap which sets a limit to what you
can get reimbursed every year. If there’s a need for further
rehab, you have to fill up more forms to get reimbursed. (
paperwork ! )
8. Furthermore you also need to be enrolled as a provider
with the insurance companies if you decide to accept
insurance, (more paperwork!).
9. If you decide to accept CASH, you have to make sure
you’re not violating rules. You have to find out if it’s
legal to accept cash if a patient has Medicare or insurance
coverage.
10. Marketing. No doctors sending you patients means no
business. So be prepared to establish a solid relationship
with doctors which means you have to set a time to do just
marketing. You can’t expect to just stay in your clinic
treating patients all day, unless you hire a marketer which
means more expenses.

Fair warning: I’ve met some
colleagues who had to use their income reserves since they
still have to pay rent and meet payroll regardless whether
they had enough patients for the month or not.

In My Opinion:
This practice model is too expensive; labor intensive and
requires high maintenance. This is not to say that there are
no successful private practice clinics out there. I’m sure
there are private practice owners who are doing well and are
happy with their situation. However, most owners that I’ve
talked to have expressed that you’re lucky to break even in
5 years. I’ve encountered more therapists who closed their
practice or are currently struggling to stay afloat. Very
seldom do I hear that this business model is great and very
profitable. I usually hear a lot of Medicare reimbursement
complaints and some are now exploring the cash based
practice in order to avoid dealing with Medicare and
insurance problems. It’s a fact that this is a tough
business. (Again, this is based on my encounters with other
colleagues. And I think this is why we can count the number
of clinics in any city. Why do you think there are more PT
employees vs practice owners? Go figure.)

#2 - MOBILE OUTPATIENT
SETTING: This is very much the same with the above model
except for some obvious differences. The differences are...
1. You have no expensive facility required since you do
house calls but still bill under Medicare part B or other
insurance providers. In the Medicare application form, you
have to specify that your treatments will be done at your
patient’s place.
2. The challenge for this model is convincing insurance
companies that your entity is still considered outpatient
and not a home health agency.
3. You’re still required to apply for a Medicare provider
number for each of your therapists as well as apply with
insurance companies to be their network provider.
4. You still have to do accurate billing codes if you want
to get paid right. ( Nope, you’re not escaping those
paperwork ! )
5. Forget hiring a PTA since they need direct supervision
under outpatient rules. It’s pointless to hire a PTA if you
have to be there by their side when they do house calls. So
your only option is to hire a PT which is more expensive
than a PTA so your profit margins are reduced.

#3 - REHAB CONTRACT COMPANY: This is sometimes
referred to contracting as a company. This is different from
a staffing company since most of those companies are head
hunters and they basically place you on a 13-week assignment
or permanent placement.

Also different from an individual contract wherein you get
paid for what you do for an agency as an individual only:
example - a company hires you to do prn eval or re-eval. In
this individual prn scenario, you only get paid for the work
you do. If you don’t do the prn work, you don’t get paid.

A rehab contract company is an entity ( usually an LLC or a
corporation ) that provides the actual therapy services on a
weekly basis by doing evaluations, re-evals, follow-up
visits and discharges LOCALLY for a certain facility usually
a home health agency . Your market is usually where you’re
located although you can expand if you want to.

The company provides PT/PTA , OT/COTA and even speech
therapy services. You can delegate referrals coming in since
you’re contracted as a company. Meaning you can still create
revenue even if you’re not doing the work yourself. This is
what I’ve been doing since mid 2003 and this the practice
model that actually paved the way for me to ESCAPE the
typical 9-5 PT job.

Here are the reasons why I chose this practice model:
1. No facility required since it’s mostly done in a home
health setting.
2. No enrollment required as a Medicare or insurance
provider (since they’re not being billed by your company
directly. Your client- the home health agency bills them!
Nice!)
3. Can be started while you’re working your full time job!
How’s that for a LOW RISK
!
You still have your guaranteed 40/hr a week job while doing
this on the side!

4. You can hire PT/PTAs , OT/COTA, SLP and ALL of them are
PRN! It’s pay as you go! Which means what you pay your PRN
staff is directly proportional to what treatment sessions
they’ve done. Totally different from having a full employee
wherein you have to pay
your staff regardless whether you have patients for them or
not.
5. Not subject to CAP. You bill the home health agency for
any services provided with a straightforward invoice per
discipline, no billing codes needed ! (You can continue your
services as long as there’s a clinical necessity and MD
order.)
6. You control the time when you want to work. No need to
clock in!
7. You don’t market to doctors! (Your client, the home
health agency does that – how cool is that?!)
8. Can be started from a home office or office in the cloud
meaning your system is online ! (how cool is that ?! )
9. You can grow this gradually until the revenue is equal or
greater than what your job pays and eventually have the
option to quit your job. ( You can ESCAPE your 9-5 job! )
10. Fastest model to start since all you need is to put up
your company, gather your team and clients and you’re in
business! So there you go. I hope you’ve learned a lot from
this article. To show you how this works, I’m giving away a
FREE VIDEO on How I
made $480/hr on 1 TKR patient using this business model.

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